Impact of Internal Integration, Supply Chain Partnership, Supply Chain Agility, and Supply Chain Resilience on
4. Data Analysis and Discussion 1. Results
There are 456 questionnaires considered valid for analysis, and the respondents’ profile is demonstrated in Table4. Most of the respondents (80%) are located in Java island, while the rest are located in Sumatera, Kalimantan, Sulawesi, Nusa Tenggara, and Papua.
Table 4.Respondents’ profile.
Criteria Description Number %
Gender Male 300 66
Female 156 34
Department
Production 150 33
Marketing 137 30
Finance/Accounting 86 19
Purchasing 26 6
Warehouse 21 5
Planning Production Control 19 4
Supply Chain Management 10 2
IT Department 6 1
Position
Lower-Level Management (Foreman level) 148 33 Middle Management (Department head) 192 42
Top Management (General Manager,
Director, and Owner) 116 25
Length of work
Less than two years 68 15
2–5 years 126 28
5–10 years 72 16
10–15 years 36 8
More than 15 years 154 33
Company size (number of employees)
Small size (<20 employees) 104 23
Middle size (20–100 employees) 233 51
Large size (>100 employees) 119 26
Based on the gender, it was found that the respondents consist of 66% male and 34%
female, which means that men dominate the employee working in the manufacturing companies. The respondents are in charge of various departments, including production (33%), marketing (30%), finance/accounting (19%), purchasing (6%), warehousing, PPC, supply chain management, and IT (12%). This department’s composition indicated that respondents covered all the internal functions of an organization. The position of the respondents shows a balance between the lower level (32%), middle management (42%),
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and top management level (25%), thus indicating their respective roles in the supply chain based on individual roles and functions. Based on the length of work, most of the respondents have working experience of more than two years (85%), which shows that employees have understood the company’s working system well and are eligible to answer questionnaires. Most of the companies are of medium and large size since 77% have more than 20 workers.
A hypothesis is accepted when the t-statistic value of the path coefficient exceeds 2.36 for a significant level of 1% or 1.96 for the significant level of 5%, and 1.65 for the significance level at 10%. This study considers that the path coefficient with a significant 10% or t value level greater than 1.64 is acceptable. Table5shows that the minimum value of the t-statistic is 1.919, which means that this study supports all nine hypotheses proposed.
The result supported eight hypotheses with a significant level of 1%, while one hypothesis (H8) with a significant level of 10%. However, Table 5and Figure2demonstrate the only direct relationship of each two consecutive constructs. Simultaneously, the research model presents three intervening variables that mediate internal integration influence on sustainable advantage. Based on these findings, this result reveals that internal integration only affects the sustainable advantage through the mediating role of the three intervening variables, namely, SC agility, SC partnership, and SC resilience.
Table 5.Path coefficients.
Direct Effect Original Sample Standard Deviation t-Statistics Internal Integration -> Supply
Chain Partnership (H1) 0.702 0.028 25.203
Internal Integration -> Supply
Chain Agility (H2) 0.387 0.056 6.847
Internal Integration -> Supply
Chain Resilience (H3) 0.333 0.054 6.190
Supply Chain Partnership ->
Supply Chain Agility (H4) 0.321 0.053 6.019
Supply Chain Partnership ->
Supply Chain Resilience (H5) 0.247 0.055 4.468
Supply Chain Agility ->
Supply Chain Resilience (H6) 0.246 0.044 5.620
Supply Chain Partnership ->
Sustainable Advantage (H7) 0.285 0.047 6.063
Supply Chain Agility ->
Sustainable Advantage (H8) 0.097 0.051 1.919
Supply Chain Resilience ->
Sustainable Advantage (H9) 0.436 0.044 9.836
The first hypothesis (H1), internal integration affects SC partnerships in manufacturing companies, is supported as the t-statistic value is 25.203. The second hypothesis (H2), internal integration influences SC agility, is supported in manufacturing companies with the t-statistic value is 6.847. The third hypothesis (H3) that internal integration affects SC resilience is accepted since the t-statistic value is 6.190.
The fourth hypothesis (H4) testing indicated a t-statistic of 6.019, which means the hypothesis is accepted, i.e., SC partnership affects SC agility in manufacturing companies.
The fifth hypothesis (H5), with a t-statistic (4.468), is also accepted, i.e., SC partnership has an impact on SC resilience in manufacturing companies. The sixth hypothesis (H6) with a t-statistic of 5.620 is accepted, which means that SC Agility impacts SC resilience in manufacturing companies. The seventh hypothesis (H7), with a t-statistic of 6.063, is also supported, i.e., SC partnerships impact sustainable advantage in manufacturing companies. The eighth hypothesis test (H8) obtained a t-statistic value of 1.919; therefore, it is supported that SC agility has an impact on sustainable advantage in manufacturing companies at the level of significance 0.1. The ninth hypothesis (H9), with a t-statistic of
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9.836, is supported, namely, that SC resilience has an impact on sustainable advantage in manufacturing companies.
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Figure 2. Path analysis of the research model.
The first hypothesis (H1), internal integration affects SC partnerships in manufactur- ing companies, is supported as the t-statistic value is 25.203. The second hypothesis (H2), internal integration influences SC agility, is supported in manufacturing companies with the t-statistic value is 6.847. The third hypothesis (H3) that internal integration affects SC resilience is accepted since the t-statistic value is 6.190.
The fourth hypothesis (H4) testing indicated a t-statistic of 6.019, which means the hypothesis is accepted, i.e., SC partnership affects SC agility in manufacturing companies.
The fifth hypothesis (H5), with a t-statistic (4.468), is also accepted, i.e., SC partnership has an impact on SC resilience in manufacturing companies. The sixth hypothesis (H6) with a t-statistic of 5.620 is accepted, which means that SC Agility impacts SC resilience in man- ufacturing companies. The seventh hypothesis (H7), with a t-statistic of 6.063, is also sup- ported, i.e., SC partnerships impact sustainable advantage in manufacturing companies.
The eighth hypothesis test (H8) obtained a t-statistic value of 1.919; therefore, it is sup- ported that SC agility has an impact on sustainable advantage in manufacturing compa- nies at the level of significance 0.1. The ninth hypothesis (H9), with a t-statistic of 9.836, is supported, namely, that SC resilience has an impact on sustainable advantage in manu- facturing companies.
4.2. Discussion
The first hypothesis (H1), internal integration impacts SC partnerships in the manu- facturing companies, is supported. Internal integration, which is implemented by data integration between departments, and data changes are communicated quickly to other functions, can improve SC partnerships. The marketing department could coordinates di- rectly with the production department concerning the incoming customer orders. The company’s purchasing department coordinates actively with suppliers when there is a change in orders from customers. This study supports previous research results stating that internal integration impacts SC partnerships in companies [14,16,17,35,42].
Figure 2.Path analysis of the research model.
4.2. Discussion
The first hypothesis (H1), internal integration impacts SC partnerships in the man- ufacturing companies, is supported. Internal integration, which is implemented by data integration between departments, and data changes are communicated quickly to other functions, can improve SC partnerships. The marketing department could coordinates directly with the production department concerning the incoming customer orders. The company’s purchasing department coordinates actively with suppliers when there is a change in orders from customers. This study supports previous research results stating that internal integration impacts SC partnerships in companies [14,16,17,35,42].
The second hypothesis (H2) states that internal integration impacts SC agility in man- ufacturing companies. Companies carry out internal integration to coordinate promptly between functions in charge, and data integration during the pandemic affects SC agility to respond to changes. Manufacturing companies can make changes to production planning quickly to adjust to conditions during a pandemic and simultaneously make the produc- tion process change rapidly according to a customer’s needs. Manufacturing companies in Indonesia continue to run normally, but some companies keep working distance by replacing two shifts previously with only one shift to maintain production capacity. This research is in line with research that states that internal integration impacts SC agility in manufacturing companies [13,19–21,43].
The third hypothesis (H3), internal integration impacts SC resilience in manufacturing companies, is also supported. Internal integration shows that all departments can access company data in real time and coordinate quickly in interdepartmental changes affecting SC resilience. Manufacturing companies can still serve customer demands during a pandemic and adapt quickly during a pandemic to form SC resilience. The cross-functional ability to find information quickly can make the right decisions to adapt during a pandemic
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quickly. Company employees can find out about the arrival and inventory of material stock, adjusted to the number of orders ordered, and decisions are made directly to the company’s operations to fulfill customer orders. This study supports the research results that state that internal integration impacts SC resilience in companies [17,18,31,33–35,40,41].
Furthermore, the fourth hypothesis (H4) that SC partnership affects SC agility in manufacturing companies is accepted. The SC partnership built allows suppliers to un- derstand changes in orders during a pandemic to adjust the production process to change quickly according to needs during a pandemic as a form of SC agility. Moreover, SC partnerships allow delivery of materials from suppliers on time, impacting the production process normally during a pandemic to fulfill predefined orders. The purchasing function, marketing function, and production function are coordinated every morning through online meetings. The resulting coordination can anticipate changes in the production process and can provide good service to customer needs. The results of this study support the results of research that state that SC partnerships have an impact on SC agility in companies [19–21,23,24,28,43].
As expected, the fifth hypothesis (H5) is also supported. SC partnerships impact SC resilience in manufacturing companies. SC partnership is in the form of a supplier under- standing of order changes which allows the companies to maintain its buffer stock to keep products that customers may need are available during the pandemic. Partnerships that can collaborate with suppliers during a pandemic will increase SC resilience because they can serve customer demands during a pandemic normally. This study supports the research results that SC partnerships impact SC resilience in manufacturing companies [18,31,36,37].
The sixth hypothesis (H6) can be accepted, and it is stated that SC agility has an impact on SC resilience in manufacturing companies. The company keeps the production process running normally during the pandemic to fulfill orders as a form of SC agility, so it is necessary to maintain a buffer stock during the pandemic period in order to be able to maintain SC resilience. The company maintains the production process by changing it into two shifts so that the work system is adjusted quickly according to government regulations to determine the occurrence of SC resilience for customers by maintaining production capacity during a pandemic. The company’s SC agility can increase SC resilience [12,30,31,40].
The seventh hypothesis (H7), SC partnerships have an impact on sustainable ad- vantage in manufacturing companies, is also supported. A solid SC partnership allows suppliers to deliver material on time so that the company’s production process runs accord- ing to a predetermined schedule and directly impacts product delivery on time during a pandemic period to increase the sustainable advantage. The company always coordinates every morning in carrying out production planning by taking into account the availability of raw materials. Additionally, SC partnerships that involve collaborating suppliers to help companies during a pandemic impact product quality that can be maintained dur- ing a pandemic period. SC partnerships impact manufacturing companies’ sustainable advantage [18,37,44].
The eighth hypothesis (H8) can be accepted, and it is stated that SC agility has an impact on sustainable advantage in manufacturing companies. According to pandemic conditions, the company’s SC agility by adjusting the resulting production capacity is associated with reliable sales volume, compared to competitors in pandemic conditions due to the company’s sustainable advantage. Besides that, the company’s agility in deter- mining production planning regarding rapid changes in adjusting to the situation during a pandemic is related to the timely delivery of products during the pandemic to achieve sustainable advantage. This study supports previous researchers who stated that SC agility impacts sustainable advantage in companies [5,11,13,27,30,38,43].
The ninth hypothesis (H9) is accepted that SC resilience impacts sustainable advantage in manufacturing companies. The company’s ability to maintain buffer stock during a pandemic period makes SC resilience reliable, thus determining a sustainable advantage in delivering products on time during a pandemic and reliable sales volume, compared to
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competitors in pandemic conditions. Many manufacturing companies experience difficulty in raw materials in the pandemic era, especially companies that are essential to preventing the spread of COVID. For companies with a high buffer stock, the disruption conditions are an advantage in meeting customer demands. Resilience during a pandemic condition for manufacturing companies still serves customer requests during the pandemic period because there is no lockdown, but the company runs a Health protocol while employees are working. Work activities carried out routinely maintain production capacity so that company profits can be relied on during a pandemic to increase the sustainable advantage.
This research supports previous research that states that SC resilience impacts sustainable advantage in companies [17,18,38,40,44].
Manufacturing companies are always trying to make integrated information systems an important tool during a pandemic because the interaction between cross-functional parties can be reduced but still reliable for the company’s internal and external coordination.
Information systems are used for internal and external integration or SC integration, which relies on SC partnerships. The company’s ability to involve external and cross-functional parties on the internal side increases SC agility and SC resilience. SC partnership, SC agility, and SC resilience impact increasing sustainable advantage during the COVID period to become a theoretical contribution to research. The practical contribution of research impacts top management to continue to empower all company internal and external functions.
The company adjusted the work system by making two production shifts to carry out government regulations related to preventing the spread of the virus as a form of resilience organization, but still producing products according to customers’ orders quickly within the built agility.
Other essential findings of this study are the revelation of the mediating role of the intervening variables, namely, supply chain partnership, supply chain resilience, and sup- ply chain agility. As shown in the research model, the second research question examines whether the SC partnership, SC resilience, and SC agility mediate the relationship of inter- nal integration on the sustainable advantage. The mediating role of the three variables was examined by looking at the two direct relationships consecutively. It has been noticed that internal integration directly affects the SC partnership (H1) and SC partnership directly affects sustainable advantage (H7). It implies that internal integration indirectly affects sustainable advantage through the mediating role of SC partnership. In other words, SC partnership does mediate the influence of internal integration on sustainable advantage.
Similarly, internal integration influences SC agility (H2), and SC agility affects sustainable advantage (H8), implying that internal integration indirectly improves sustainable advan- tage through SC agility. Furthermore, since internal integration directly affects SC resilience (H3), and SC resilience directly influences sustainable advantage (H9), it can be concluded that internal integration indirectly affects sustainable advantage through SC resilience.
As expected, the results indicate that those three intervening variables do mediate the relationship. This finding implies that internal integration has multiple effects on the sustainable advantage when a company implements supply chain partnership, supply chain resilience, and supply chain agility. These findings have highlighted the importance of internal integration to improve the sustainable advantage of a company. Moreover, the organization also needs to integrate with its external partners enabling quick coordination to pursue any customer demand changes. The integration with external partners allows the company to establish supply chain partnerships, develop supply chain agility, and supply chain resilience to pursue improved sustainable advantage. The collaboration with an external partner such as supplier and distributors, called supply chain partnership, enables the company and partner to forecast, plan, and adjust the production to any customer demand variation. SC partnerships allow suppliers to understand changes in orders during a pandemic, adjust the production process to change quickly, and increase their buffer stock and adjust to customer needs. Furthermore, the supply chain agility enables the company and its partners to cope with any sudden changes in demand volume, product varieties, and delivery schedule requested by the customer. At the same time, the supply chain
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resilience allows the company and its partners to meet its promise to the customer even though any constraints due to disruption in supply, transportation, and logistic network.
Finally, when the company implements internal integration and establishes supply chain partnerships, it enhances supply chain agility, and supply chain resilience will increase the sustainable advantage, enabling the company to meet any change in customer demand at any time.